DBE join others in reducing interest rate

The Development Bank of Ethiopia (DBE) announced a significant reduction in interest rate to its customers to help them ease away the effects of the corona virus.
According to Haileyesus Bekele President of the Bank, the bank has made 4 to 5 percent interest rate reduction which it has been charging between 11.5 to 12 percent. “The reduction is for three month starting from April,” the president said.
The reduction on interest rate is different based on the vulnerability of the sector to the crises, which is 7.5 percent to hotel, tour operators and poultry farms and 8.5 percent for other sectors and industries.
According to the president because of the reduction the bank will lose more than 460 million birr and also due to the pandemic the bank failed to collect 1.5 billion birr loan in payment terms.
“If the situation continues the bank will continue the reduction for additional time,” the president said.
In addition to the interest rate reduction DBE has cut off additional payments for other services including letter of credit service charge and decided to reschedule and postpone loan settlement period.
Also to stabilize the market and solve the problem of hard currency shortage to buy commodities the bank has given out 2 billion birr to consumer cooperative unions.
So far the bank avails 49 billion birr total loan for more than 2,200 projects all over the country. Recently the Council of Ministers approved to increase the authorized capital of DBE to 28.5 billion birr by adding 21 billion birr.
The state owned development financial institution is supervised by the Public Financial Enterprises Agency and supports developmental projects mainly agricultural, industrial, manufacturing and foster the investment of private capital for productive purpose. One of the mandates of the bank is the provision of development credit to viable priority projects along with technical support through mobilizing resources from domestic and foreign sources.
Priority area projects financed by the Bank include commercial agriculture, agro-processing, manufacturing and extractive industries. DBE also extends a special line of credit for borrowers that operate in the textile, garment and leather and leather product industries. As an additional special line, the Bank offers credit for the procurement of raw materials in the pharmaceutical industry and to companies that supply products to corporate government entities.